EastWest Bioscience Reports Third Quarter 2019 Financial Results
VANCOUVER, BC / ACCESSWIRE / July 4, 2019 / EastWest Bioscience (the "Company" or "EastWest") (TSX.V: EAST) expands on its vision, strategy, and outlook for the future and comments on its 3Q financial results for the three months ended April 30, 2019.
"US Approval was a tremendous achievement this quarter," explains Rodney Gelineau, CEO of EastWest Bioscience. "The team has continued to develop our product pipeline, with the initial production of our Chanvre Hemp Shampoo and Conditioner and the introduction of four additional pet treats into the Canadian Market. With the addition of the four additional pet treat products, Happy'Cat, Play'n'Dog, Quick'Cat and Chill'Dog, the Company anticipates the US market for its nationally available Hemp based
pet treats to quickly overtake Canadian demand."
"The US Market is now within our sights. Eastwest concluded its Joint Venture agreement with Azema Sciences, allowing it to start the production of CBD from its Kentucky facility, for its line of consumer products. Ensuring feed stock supply and stability is essential to ensure that we can fulfill expected demand for our products in the United States."
- February 2019, the Company announced the first shipment of its premium granola-style hemp seed and fruit snack bars under its Earth's Menu food product brand. Chewy Goodness, Unapologetically Delicious snack bars, formulated in three delicious and nutritious flavours - Omega Apple, Omega Cranberry and Blueberry Raisin - all Kosher and Peanut free. The first products are shipped into EastWest's two warehouse facilities with retail purchase orders already in the pipeline.
- February 2019, the Company announced the manufacturing of the first two products of its newest line of hemp-based products being introduced in 2019. The Company's HempBeauti Shampoo and Conditioner are the first of a series of premium ultra-clean body care products under the ChanvreHemp brand line. HempBeauti Shampoo and Conditioner were in stores early May 2019.
- February 2019, the Company announced Ms. Ciska Asriel has been appointed Chief Operating Officer of the Company.
- March 2019, the Company announced it had received several new purchase orders for its hemp-based consumer goods from global retailer The TJX Companies, Inc (NYSE: TJX), the leading mass retailer of apparel and home fashions in the U.S. and worldwide
- March 2019, the Company announced that it had received its first order from Natural Pet Distributors ("NPD") (www.naturalpetdistributors.com) one of its major eastern Canadian pet distribution partners. In accordance with its overall execution strategy to increase retail distribution of its family of products in 2019, Natural Pet Distributors provides a significant partnership for EastWest providing distribution into independent and major chains of pet channels in Canada. Representing over 550 pet retails stores in Southern Ontario and Quebec, Natural Pet Distributor's customer base is a deep and important combination of several independent retailer networks, including some of the largest and fastest growing pet store chains in Canada, such as Global Pet Foods, Pet Valu, and Ren's Pets Depot.
- April 2019, the Company announced that it is had completed the sale of 2,283,168 units of the Corporation ("Units") at a price of $0.15 per Unit for aggregate gross proceeds of $342,475. Each Unit consists of one common share in the capital of the Corporation ("Common Share") and one-half of one share purchase warrant, with each whole warrant ("Warrant") entitling the holder thereof to purchase an additional Common Share at an exercise price of $0.20 per share for a period of two years from the date of its issuance.
- April 2019, the Company announced that the TSX Venture Exchange gave EastWest Bioscience Inc. the green light to sell its products containing CBD in Kentucky, USA. Until then, because of rules imposed by the TSX due to legal uncertainty regarding business operations involving any products derived from hemp, the Company was restricted from doing business in the USA. Now, with the TSX-V lifting those restrictions, the Company is free to manufacture and sell its CBD infused products under both US Federal and Kentucky State Law.
- April 2019, the Company announced the appointment of two new independent Directors, Paul Mandl and Jeff Bierman, to the Board. Both of these new board members will help to ensure the Company is well-equipped to efficiently execute its expansion into the US and EU.
- April 2019, the Company announced the incorporation of EastWest Science USA (EastWest USA), a wholly owned operational subsidiary focused on CBD consumer products, manufacturing, production and distribution based in Marion County Kentucky, the heart of hemp growing and processing in the USA.
- April 2019, the Company announced four additional products to its Natural Pet Science line, both in Canada and the USA, with CBD included in the USA destined products and which will be marketed to CBD permitted jurisdictions. With the addition of four additional pet treat products, Happy'Cat, Play'n'Dog, Quick'Cat and Chill'Dog, the Company anticipates the US market for its nationally available Hemp based treats to quickly overtake Canadian demand.
- April 2019, the Company announced that on April 29, 2019 they signed an LOI with Azema Sciences Inc. ("Azema" or "Azema Sciences") to Joint Venture on a preferred supply and distribution agreement for bulk CBD and finished CBD products throughout the US and Globally. EastWest entered into a joint venture with Azema, securing for EastWest first rights on Azema's output of bulk CBD and finished CBD products. EastWest Science USA ("EastWest USA"), EastWest's US operating division, will be the preferred distributor for Azema's finished goods. The Definitive Agreement was signed on June 20, 2019.
- Overall Company revenue of $699,991 compared with previous period of $1,044 for the three months ended April 30th, 2019.
- Overall Company manufacturing and distribution revenue of $478,692.
- Overall Company royalty revenue of $124,408.
- Overall Company revenue of $96,891 by way of pass through lease arrangements.
- Gross margins were $109,304 or 22.8% for the three months ended.
- Net Loss of $828,045 compared with previous period of $635,774 during the three months ended April 30th, 2019.
- Cash loss of $703,041
- Amortization of $17,004
- Rent (recovery) and Utilities non-cash $108,000
- Current Ratio is 2.09:1 with Current Assets covering Current Liabilities by $939,447.
- Buyout of Aquila on Valley for 100% ownership of NPNs and manufacturing operations.
- Non interest-bearing payment terms over time on consideration for Sangsters.
In the near term, the Company anticipates continued top-line revenue growth as it develops and releases new products and moves forward with expansion into the USA and the EU.
"Our hemp-based products are already unique, and we continue to gain shelf space," explains Gelineau. "With the infusion of CBD into our existing products, we anticipate a significant competitive advantage. Additionally, EastWest is working on several joint ventures which will allow the Company to fully realize assets and generate additional revenues for the EastWest group of companies."
About EastWest Bioscience Group
EastWest Bioscience is a vertically integrated wellness company with the infrastructure to become a global giant in the Hemp & CBD consumer health market. Since it was founded in 2016, EastWest continues to grow as a high-quality producer, manufacturer and distributor of multiple lines of premium health and hemp products. EastWest currently has more than 200+ NPN's in its stable of products.
EastWest's Hemp consumer product lines are divided into four distinct brands: 1) Natural Advancement - natural biopharmaceutical health supplements; 2) Earth's Menu - all-natural hemp superfoods; 3) Natural Pet Science - pet food and pet supplements; and 4) ChanvreHemp - all-natural health and beauty products.
EastWest's CBD consumer products currently available are Chill Dog and Quick Cat under the Natural Pet Science unit.
In Canada, EastWest has a 34,000 Sq. Ft, Health Canada-licensed, GMP (Good Manufacturing Practices) - certified manufacturing facility and produces premium nutraceutical brands, offering natural products for a preventive care lifestyle. EastWest and Benchmark Botanicals (BBT-CSE) also have a Joint Venture Intent to accelerate acquisition of Processor, Analytical and Research and Development licenses under the Cannabis Act in EastWest's Penticton facility. These three classes of the Cannabis Act license will allow Benchmark and EastWest to build out an extensive extraction, laboratory, and research facility at EastWest's Health Canada Certified facility.
In the USA, EastWest USA has a Joint Venture with Azema Sciences, securing for EastWest first rights on Azema's output of bulk CBD and finished CBD products manufactured, and which are ready for sale in the USA and globally. EastWest Science USA ("EastWest USA"), EastWest's US operating division, will be the preferred distributor for Azema's finished goods. These finished products will include CBD creams, tinctures and salves which are products not currently in EastWest's catalogue. Additionally, EastWest will have first right of refusal to all potential opportunities relating to Azema's Kentucky based CBD processing facility. EastWest currently has TSX Approval for sale of its consumer products in 21 US States.
EastWest's international expansion continues with reach into important key markets in New Zealand, Australia, and Asia through a distributor agreement with New Zealand Hemp Brokers. Headquartered in Rotorua, New Zealand, NZ Hemp Brokers have quickly grown to become one of the country's most trusted industrial hemp wholesalers, and New Zealand's only import/export broker specialising in hemp products. NZ Hemp Brokers is licensed by the NZ Ministry of Health to grow, trade in and process industrial hemp, are registered brokers and certified in hemp medicine by the NZ Hemp Foundation.
ON BEHALF OF THE BOARD OF DIRECTORS
EASTWEST BIOSCIENCE GROUP
Co-Founder, Chief Executive Officer and Director
TSXV - Symbol: EAST
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the terms and conditions of the Acquisition. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE:EastWest Bioscience Group
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